The Union Budget 2025 has introduced significant changes to India's income tax structure, aiming to simplify tax compliance while providing relief to the middle class. The new tax regime has been made more attractive with enhanced standard deduction and restructured tax slabs.
| Income Range | Tax Rate | Notes |
|---|---|---|
| Up to ₹4,00,000 | 0% | After standard deduction |
| ₹4,00,001 - ₹8,00,000 | 5% | Effective rate lower due to standard deduction |
| ₹8,00,001 - ₹12,00,000 | 10% | Progressive increase |
| ₹12,00,001 - ₹16,00,000 | 15% | Moderate progression |
| ₹16,00,001 - ₹20,00,000 | 20% | Higher income bracket |
| Above ₹20,00,000 | 30% | Maximum rate |
The new tax regime offers several advantages:
While the old regime offered various deductions and exemptions, the new regime compensates with:
The new regime is particularly beneficial for:
The new tax regime represents a significant shift towards simplification of the tax structure while providing substantial relief to taxpayers. While the choice between old and new regimes depends on individual circumstances, the new regime offers clear advantages for many taxpayers.
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